Swiss government bonds, bond funds

I agree here and one can not simply compare 1-3y Swiss government bonds with 1-3y US treasury bonds. So yes indeed 1.36% is already very good compare to what we saw in the past years.

I dont think thats accurate. In this case the bond etf price changed only because of the interest changes of the SNB.
The weighted avg coupon (which is anyway totally irrelevant) is higher, as new bonds coming into the etf, have a higher coupon and weight more, due to the higher face value.

As now Switzerland 1 year bond has 1.5% yield, and I have piled some cash I would like to park part of my cash for a short period there.
How can I buy them? I have not experience buying any kind of bonds.
Thanks

I have +100K CHF.
I have Interactive Broker, but I am open to use another broker if fees are much lower.
I think it would be a good idea to buy 1 year CHF bonds like every month 10K. So parking that money in bonds and distributing it on time, I would get an average yield (maybe it will go up or down, who knows) and after a year when the money in bonds are getting free, monthly I will be able to reinvest in bonds again or in stocks if the market is crashing and good opportunities appear.

I got the idea of 1.54% yield for 1-year CH bond from Switzerland Government Bonds - Investing.com, but maybe I am mistaken.
Do you know any list of corp bonds with high yield/risk in CHF?
Which is a good broker to buy Swiss bonds or Swiss corp bonds?

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As swiss interest rate is becoming > 1%, I am trying to buy swiss bond directly

I have try to benchmark swiss bank but they take in the better case ~60 bips of fees on a 1% rate
That’s huge

Does anyone know how to buy the swiss treasury directly or a product that is much more competitive than bank cash account ?

Thanks for your help

Does Swiss national Bank issue any debt instruments, actually? I think not.

Why should Swiss confederation issue debt instruments to satisfy investors’ needs? No thank you, I prefer current system where our state budget is not excessively in debt and the bonds are issued only occasionally and mostly for specific projects. And not that the new debt is used to repay old debts, forever.

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Sure, I just don’t understand why banks get access to higher rates than retail customers.

There’s a huge spread between rates accessible to banks and rates accessible to retail investors in Switzerland that does not exist to this extent in the US.

I guess the way to limit debt is to issue less debt, but access to debt should be equal for retail customers, unless we want to subsidize our banking system.

I like the auction system of the US where everyone has access to.

But maybe I lack some understanding here.

I don’t think there’s many countries where people have access to the primary market (I assume it’s a bit of a pain for treasuries to deal with it, and it’s not their primary job vs. making sure their debt emissions are selling), and it shouldn’t be an issue since retail have access to secondary markets.

The main issue for me is the high fee of swiss brokers/banking/exchanges, which is probably due to the size of the market and lack of competition.

(If you could buy 10k worth of confederation bonds, or pfandbrief on SIX for 1-2 CHF, it would be worth it, but currently you’re more likely to have to pay 100x that in fees)

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Absolutely, that’s exactly the point I was trying to get at. You’ve expressed it way more aptly :smile:

It does on behalf of the Swiss Confederation:

You can trade Bundesobligationen (Federal Bonds) of various durations on SQ. The yield curve is fairly flat and YTM are around 1.3%. If you hold to maturity (no exit fee), but 50k worth and use fix trades it will cost you about 0.3% incl stamp duty to buy.
But you may as well go for a Kantonalbank bond and lock in 1.8% with a nominal amount of extra credit risk.

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Have been reading here for a couple of weeks already, but finally signed up to ask some questions :slight_smile:

I am looking to shift my “low risk” part of my portfolio from cash in bank account to something more safe. I read a lot that there is no safer way to keep money than government bonds in your domestic currency with short duration.
So I had a look and did not find much besides the here already posted iShares ETFs and I’m particularly interested in the one with the shortest duration (0-3y).

I am still not 100% sure if I understood the product because of the price loss over the last 8y. Especially since the coupons in most of these years would have been 0 or negative. So investors lost even more than whats visualized in the chart?

What are you doing right now with the low risk parts of your portfolio?

This is BS. Your money is not safe in short-term gov. bonds, there’s inflation, rate and currency risk.

How is there currency risk? What safer options are there in your opionion for low risk investments?
I am not expecting protection against inflation for this part in my portfolio, that is the riskier parts job.

Obviously there’s no currency risk with bonds denominated in your own currency. Re-investment risk is a concern. Inflation less so with short duration bonds, but this can be mitigated by buying inflation protected bonds.

If you buy a Swiss government issued inflation-linked bond with the maturity of the investment period you want and hold to maturity, then you will have practically no risk. However, the interest rate you receive will not be high (perhaps even negative).

Safest bond-like investment is to pay off your mortgage if you have one.

It’s also an option to take the small loss on negative yielding fixed debt if you are really risk averse, to keep your powder dry and look to invest again in a year or two if markets become more attractive.

Such bonds don’t exist, as far as I know. Inflation-linked government bonds are issued in many countries but not in Switzerland.

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You can check the BNS website they have a list of confederation bonds. There are 0 coupons but not negative one.

If anything that can be good due to tax advantage now that there are higher yields.

Switzerland is perhaps the country that least needs it. Though the introduction and expansion of QE in Switzerland did make me nervous.

Also Inflation linked bonds don’t do what most people think they do (they allow to bet for/against inflation expectation, and often have lower real rates than regular bonds)

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